Tax the Rich? New Polling — and Colorado History — Suggests It’s Possible
By: The Colorado Fiscal Institute and The Bell Policy Center
Growing Popularity for Increasing Taxes on the Wealthy
With a push for fairer taxes gaining steam nationally, new polling shows Coloradans may be ready to embrace this approach, and recently released research shows most states that raised taxes on their wealthiest citizens didn’t experience economic repercussions.
A survey conducted by Colorado-based Keating Research for the Bell Policy Center shows a majority of voters support increasing taxes on the wealthy and corporations and using the new revenue to help families pay for early childhood education. Sixty percent of Colorado voters are in favor of such a plan, including 44 percent who say they strongly support it. Democrats (92 percent support), Hispanics (80 percent support), women (65 percent support) and voters aged 18-49 (64 percent support) are the voters most likely to support this plan. Among unaffiliated voters, 56 percent are in favor.
This new data adds deeper insight to previous Keating polling done in the days before November’s election. When asked about raising taxes on the wealthy to provide more education, health care, and child care funding, 57 percent of Coloradans said they agree. This sentiment was echoed by Amendment 73’s results, which saw 46 percent of Coloradans in support of the wealthy paying their fair share in taxes to support K-12 education.
In the most recent polling, voters were also asked about the amount of taxes they pay for state services they receive. Two-thirds of voters say they pay the right amount or not enough, underscoring the lack of demand for a tax cut in Colorado.
New Research Diffuses Critics of Progressive Tax System
Public opinion may have shifted, but concerns about unintended short-term economic consequences after so-called “millionaire’s taxes” go into effect could still give pause to policymakers, and even some supportive voters. New research from the Center on Budget and Policy Priorities (CBPP), a Washington D.C.-based think tank, may go a long way to assuaging those concerns.
The research serves to dispel many of the claims espoused by anti-tax special interest groups. According to CBPP, states that increased taxes on the wealthy generated substantial revenue for public investments benefitting the state as a whole, while meeting or exceeding economic growth compared to neighboring states with no such taxes in place. Additionally, their research shows differences between various state tax codes had minimal effects on economic growth within states, and wealthy people who saw their taxes go up didn’t move to states with lower taxes.
New Perspective on TABOR
Armed with new polling and research — not to mention a sizable bloc of voters who want to see the wealthy and corporations pay their fair share to support better opportunities for Colorado families — it’s possible we will soon join the majority of other states and the federal government in taxing income progressively.
What some Coloradans may not know is for the 50 years prior to adopting a flat income tax rate of 5 percent, Colorado used a progressive income tax system with a top marginal rate of 8 percent. A few years later, the passage of Article 10, Section 20 of the Colorado constitution — the infamous Taxpayer’s Bill of Rights (TABOR) amendment — made the flat tax permanent by prohibiting progressive income taxes (where marginal rates rise as income rises) like the ones used by the federal government and 34 states
Even though TABOR had already created many barriers to a fair tax system, lawmakers made matters worse by lowering Colorado’s income tax rate in 1999 and again in 2000. The flat tax rate of 4.63 percent has since served as the main culprit in the state’s unfair upside-down tax code, where the wealthier a person gets, the less they pay in state and local taxes as a percentage of their income
Given the growing support from Coloradans to implement a progressive tax system, do they support removing TABOR’s limitations to this approach? That remains to be seen.